Categories of a Green Supply Chain

Over the past few decades, businesses and professional consulting have focused their supply chain management efforts on efficiency and actions to reduce costs. Popular practices such as Lean, TPS, Total-System-Value, Just-In-Time, and Six Sigma have been used to create efficiencies and reduced total supply chain costs. While these practices provide great insight into cost reduction, the next generation of companies is integrating sustainability concepts into their supply chains to evaluate risk and sustainable development opportunities.

According to IBM, it is often useful to consider categories of risks as a starting point in an initial assessment of a supply chain. Today’s supply chains face risks from many factors, including:

•    Increased globalization through outsourcing, which elongates end-to-end supply chains

•    Additional regulatory compliance imposed by government entities, further complicating international trade

•    Increased levels of economic uncertainty, which create additional variability in demand and supply and make it more difficult to accomplish demand supply balancing

•    Shorter product lifecycles and rapid rates of technology change, which increase inventory obsolescence

•    Demanding customers who have created additional time-to-market pressures by requiring better on-time delivery, order fill rates and overall service level efficiencies

•    Supply side capacity constraints, making it more difficult to meet demand requirements

•    Natural disasters and external environmental events, which can wreak havoc on global supply chains

At Taiga Company, our business sustainability consulting considers risk along with other categorization methodologies, including spend classification and functional categorization. We believe successful implementation of any sustainable supply chain process requires visibility, engagement, and alignment with all process stakeholders. Our sustainability consulting focuses on specific business drivers that help define sustainable supply chain categories.